August 28, 2015
On Aug. 10, Google rocked tech communities all across the world with its aptly titled G is for Google. In the post it was announced that the search giant would be folded into a larger conglomerate company known as Alphabet.
Google co-founder, Larry Page, was quoted on the new company name when he stated: “We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations.” But what exactly does this transition mean for Google and its current and future projects?
Under Alphabet, Google will no longer prosper through search and advertising alone. Essentially the company is now dividing up its current projects by establishing them as sub-companies under the Alphabet umbrella, allowing the newly formed Alphabet to focus efforts in fields such as health, energy and transportation.
While Larry Page and Sergey Brin will remain at the helm of Alphabet, Page as CEO and Brin as president, other high level employees of the Google Corporation will now be appointed as CEO’s of these newly formed companies. The senior vice president of product, Sundar Pichai, is now taking over as the new CEO of Google, and will continue to remain focused on internet products, android, search and ads.
Some of the former Google projects that are now being fleshed out into sub-companies of Alphabet with new leadership include:
• Calico, which focuses on age-related diseases;
• YouTube, which will gain a new CEO that now reports to Pichai;
• Fiber, the company’s robotics division, which seeks to provide ultra-fast internet services;
• Nest, which develops “smart home” products, and;
• the Google X lab which is the future-forward division that focuses on things like driverless cars and drone deliveries.
Additionally, Google Ventures and Google Capital will also become independent under Alphabet.
Sergey Brin will continue to lead the Google X division while also acting as President of Alphabet alongside Eric Schmidt who has since been appointed as Alphabet’s executive chairman. But despite all of the criticism online, Larry Page has stated: “We are not intending for this to be a big consumer brand with related products — the whole point is that Alphabet companies should have independence and develop their own brands.”
Page strongly professes that all of the companies under Alphabet will retain a great deal of independence and be managed by strong and capable CEOs.
While many have speculated that appointing the new CEOs is merely a ploy to retain top talent within the company, the upside is that with new leadership these stand-alone companies now have the flexibility to take risks and experiment with new possibilities and projects without interference.
On the downside, many foresee internal competition for revenue and resources as the new CEOs must still report to Page and his board for financial approval for new ventures which could cause many rifts in the Alphabet organization.
Another speculated side to the Alphabet transition is that this move is in part to divert future overreach scrutiny. As it currently stands, Google faces a possible $6 billion penalty from the European Union. This is due to a European antitrust investigation that alleges that Google has abused its dominance to rank its own products ahead of competitors in search results despite what is best for user experience.
Under the new Alphabet Corporation, if critics call foul play over privacy or overreach issues, Alphabet can make an attempt to argue that there is a separation between the two organizations.
But even if Google is fined that amount, it shouldn’t be too troublesome for a company that posted $17.7 billion in sales last quarter, $4.3 billion of which is profit, and has $61 billion in cash. Not to mention that the Alphabet announcement sent Google’s (or should we say Alphabet’s) stock soaring with another six percent increase after receiving a 25 percent increase earlier this year.
While it seems that this transition can potentially solve many of Google’s current issues, like a lack of financial transparency and talent retention, the new Alphabet structure may pose just as many problems as the old model.
But despite current and possible future issues, Alphabet and Google are sure to expand at rapid speeds into new ventures, new markets, and new arenas all together in the very near future. With a group of extremely talented CEOs taking over older operations, Page and Brin are free to explore entirely new territories with nearly unlimited potential for the kind of impact that these new endeavors could have on the Alphabet brand and the public at large. Google has already changed the world once with the search engine that is now a household name, so it is exciting to see the possibilities this company could bring to life under its new corporate structure.
What are your thoughts on this re-branding mission by Google? Do you think this is simply a move for talent retention or does Alphabet have much bigger plans for the future ahead?
Digital producer, online marketer, community manager, and multi-faceted writer Tina Courtney-Brown has been managing cross-functional teams for online businesses since 1996. Tina has assisted many clients in maximizing online production and marketing efforts, and is a staff writer for SiteProNews, one of the Web’s foremost webmaster and tech news blogs. She’s produced and marketed innovative content for major players like Disney and JDate, as well as boutique startups galore, with fortes including social media, SEO, massively multiplayer games, community management, social networks, and project management. Tina is also a certified Reiki practitioner, herbalist, nonprofit director and spiritual counselor. Learn more at her personal website, or find her on Facebook and Google+.